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Tuesday, 30 October 2012

Rail Franchising - It's A Mess

Transport Secretary Patrick McLaughlin must be getting used
to being hauled before the House of Commons to make statements telling his
colleagues what
a complete shambles the rail franchising process is. Yesterday he was there yet again,
explaining why the process for InterCity West Coast (ICWC) had been such a
mess, as incumbent Virgin Rail Group readied itself to carry on a little
longer.

He told of “significant
errors ... inadequate planning ... flawed process”, but there are more
specific and telling revelations. Sam Laidlaw’s review also found that there
had been “inconsistencies in the
treatment of bidders”, which confirms a point I made when
discussing the antipathy that had grown up within the Department for
Transport (DfT) over a number of years towards VRG.

When VRG made their legal challenge, they did not touch on
this issue – because clearly they were unaware of it – but it is not only
material to the process, but also signally disturbing. What Laidlaw is merely
hinting at – but, as Sir Sean almost said, I think we got the point – is that
the DfT were prepared to favour one bidder, which turned out to be FirstGroup,
in order to rid themselves of VRG.

Put directly, that is bang out of order, and it should
therefore surprise nobody that three Civil Servants were suspended over the
affair, once the errors in the calculations had been discovered and the
re-franchising abandoned. It also makes the next stage in the affair that much
more sensitive: the DfT really will have to show that there is no favour or disfavour
being shown to any bidder.

And there is also a need to do something, and soon: there
are other franchises, notably Great Western (the incumbent, also a sensitive
point, is FirstGroup), and what is now called Essex Thamesside (formerly C2C,
and before that LTS Rail), coming up for bidding. The current process must be
sorted soon, or if not, a revised process set up – if there is to be franchising at all in future.

The reason for that last point is that there is now rather
more talk of moving, for some of the passenger network at least, to a
concession system, like those in operation at both Merseyrail Electrics and
London Overground. Commentators such as Christian Wolmar, who has declared an
early interest in being the Labour candidate for the next London Mayoral
election, are supportive.

Arranged against them, as
Wolmar has noted, is the Association of Train Operating Companies (ATOC),
for whom the idea of not being able to extract the maximum amount of gravy from
one’s train is clearly anathema. But any Government should be able to see that
the public purpose is the one that should take priority, rather than the profit
maximising imperative of the few.

And that is the problem now facing Patrick McLaughlin. No pressure, then.